Areas you can buy property in Switzerland
- Areas where it's relatively easy to buy as a non-swiss resident
- Areas where it's fairly difficult to buy as a foreign buyer
- Areas where it's nearly impossible to buy as a foreign buyer
Can I buy property in Switzerland as a foreigner?
Yes you can! But if you want to stay in Switzerland for more than 90 days, you will need a residence permit.
There are different permits available depending on your requirements. Typically, the majority of persons from abroad will apply for a renewable B permit that allows them to live in Switzerland and if they wish to, also work.
B Permit holders are allowed to purchase any property without having to apply for a separate permit.
EU citizens are also allowed to purchase in addition to their domicile home additional homes that would not be used as primary domicile but e.g as vacation homes. The number of properties available to foreign buyers is limited by the Swiss Government.
Good rental areas: The Valais & Vaud
The ski resorts of Valais and Vaud are great rental zones and ensure a faster property appreciation than other areas.
Another major benefit about buying a property in the Valais region is the zero inheritance tax. This does not apply to all cantons, so ask before you buy. PLUS! Mortgage rates start at 2.5 % or even lower, and the notary fees are low in Valais.
Where is it difficult to buy?
Avoid rural areas, non-tourist zones, and certain Cantons. Have a look at the rough map on this page, it'll give you an idea of restricted zones and areas with restrictions. You'd be surprised to know that a well-known tourist spot, like Zermatt, have decided not to let foreigners buy. Many other areas either have a total ban or strict restrictions for foreign buyers.
The Lex Friedrich law sets the guidelines for foreigners buying properties in Switzerland so as to avoid any speculation with regards to real estate. This way the Swiss market remains stable and offers a safe investment.
There are exceptions, for instance:
In certain Swiss Cantons, foreigners can invest money into buildings with a moderate rent. Such as new-build, or multi-apartment blocks, which are rented out for low rent, less than the market value. This makes you exempt from local taxes for a period of up to 20 years. After this the rent can be raised.
What restrictions are there?
Foreigners as a non-Swiss family can only buy one property.
The size of the property can be of up to 200 square metres in living area. For chalets the plot area is limited to 1000 sqm. When a child of the family reaches the age of 20, they may purchase one property, having proved financial independence.
Certain Cantons restrict the time within which the property can be resold.
The limits vary from Canton to Canton - for example it is not unusual for a buyer to have a restriction of resale within the first five years of ownership. After the time has elapsed it is possible to resell the property, either to a foreign or a Swiss buyer. The rules may have exceptions that after certain criteria are met, resale would be possible at an earlier stage.
An owner can occupy their property for up to six months per year, with three months maximum per stay.
A property can be rented out for a maximum of 11 months and one week per year.
An EU citizen with a Swiss residency permit type B, and anyone with residence permit type C, will have virtually no limitations for buying a property in Switzerland. We suggest you talk to your local notary who will help you to apply for permits.
What is the purchase procedure?
A local Swiss Public Notary will act for both the purchaser and vendor to complete the transaction. He is there to protect the interests of both parties and he will draw up the deeds and documents required for legal ownership.
Once the purchaser has chosen a property, be it a villa, a castle, land, an apartment or a chalet, the purchasing procedure is straightforward through the Notary:
a. Complete personal details forms and Power of Attorney documentation.
b. Payment of the agreed deposit to the Notary's account.
c. Signing of the deed of sale.
The purchase of an apartment becomes valid once the owner is registered at the Land Register.
All contracts are carried out in Swiss Francs.
If the property is being bought by a non-Swiss resident the Notary will apply on their behalf to the Cantonal authorities for an authorisation permit. The time taken to receive authorisation varies from commune to commune and depends on the current status of permit allowances and allocations in each particular area.
Once the authorisation has been received and the property purchase completed, the notary will record the deed of sale with the Land Register.
What costs will be involved?
The buyer is responsible for the notary fees, land registry fees and Government purchase taxes, which vary from Canton to Canton. For example, in Valais these will amount to 2.5% of the total property purchase, whereas in Vaud that figure is 5% and in Bern 3%.
Owners of second homes in Switzerland are liable to annual taxes, which amount to about 1,3 % of the purchase price p.a.This figure consists of several small taxes including land tax, tourist tax and wealth taxes. Also included is a tax on estimated rental income from the property regardless of whether or not the property is actually rented out during the year.
Taxes are paid to three bodies:
1. The Swiss Government (Federal tax)
2. The Canton (Cantonal tax)
3. The Commune (Communal tax)
With apartments and property with shared areas/facilities the following also apply:
2. Co-ownership charges (about 0.8 % of purchase price p.a.)
Each purchaser acquires a share in the Propriete Par Etage (PPE), which means co-ownership by floor. The total annual costs of an apartment building are shared between the apartment owners, proportioned according to the size of each apartment. It is commonly estimated that the annual running costs of a building are about 0.8 % of the purchase price.
These costs are divided up proportionately between the owners, according to the size of their apartment.
These expenses include:
- caretaker / social security contributions
- maintenance of building and materials
- water / gas / electricity and heating
- insurance and various taxes
- gardening and maintenance of roads
- administration fees and various expenses
- an allocation to the building's renovation fund
The manager (of the co-owned property) collects the relevant amounts covering the total expenses incurred by the building. These are payable quarterly or half-yearly. Every Canton has its own rules, so if you do plan on buying you'd need to find a local Notary.
We can help you with finding an English-speaking Notary, which bank to use, arrange viewing trips, travel, and accommodation.
If you would like more information, contact us by email: firstname.lastname@example.org and we'll be happy to help.